How to Trade Gold for Money

Do you know how to trade gold for money? Gold is precious ‘commodity money’. People hold on to it for many reasons. However, one of the main reasons why they hold it is so that they can sell it and use it to generate more income or money in the present time or future. This is commonly done through investments. It’s a great safe haven for uncertainty. In fact, our currency used to be gold backed. It wasn’t until we moved away from that with the dollar, that we’ve had issues with our country’s finances.

Trading Gold For Money

There are many ways in which you can trade gold for making money and one way is through investments. When it comes to investments, buying financial instruments is a great idea and it starts with stocks, commodities, assets, ETFs and futures.

If you want to trade your gold for investment purposes, the best way to go about it is to sell it at market rate and bring the money home. Then, do your research on which instruments to buy and then open a trading account and start buying.

Have you ever wondered why some investors are so obsessed with investing in gold? After all, it’s not really a rare metal as we now know. It has its value for sure, but it’s definitely not due to scarcity.

Unless you like to collect and wear jewelry, gold probably hasn’t really moved the needle for you. But in times of market volatility, gold is one of investment assets that typically maintains its value. Herein lies the true value of gold. 

Growth investors will call gold boring, and to be fair, it is. But when stocks are crashing and inflation is running wild, sometimes boring investments are what keeps you afloat. There are plenty of different ways to invest in gold.

You might not think to look at gold, especially if you are into high growth tech stocks or speculative cryptos. Heck, I’m one of those investors too. So let’s dive a bit deeper into why you might want to have some gold in your portfolio, and how you can gain exposure to it.

How to Trade Gold for Money by Buying Stocks

How to Trade Gold for Money

One way to trade gold for money is to buy stocks. You can essentially sell gold to buy stocks that pay dividends or to just buy stocks and sell them at a later time for higher gains/profits.

The best way to go about stocks is to do some research on the most important stocks today and build a portfolio around it. Our tip is to ‘mix it up’.

Which you can do by buying small cap stocks, mid cap stocks and high cap stocks. This will help you diversify your portfolio the most and help in increasing your profits and returns as well. To get started on investing in stocks, you need to register an online trading account, deposit some money and get started on trading right away.

However, make sure you know what you’re doing if you’re going to trade gold for money. For example, know how to fund support and resistance. Have a trading plan mapped out. And know how to read charts. Then you can safely trade precious metals.

Go For ETFs

How to Trade Gold for Money

Another way to trade gold for money is to buy ETFs. ETFs are exchange traded funds. They are a type of investment fund and an exchange traded product, which is well traded on the stock exchange.

ETFs are a better option than mutual funds. They offer low operating costs, greater transparency and better tax efficiency.

Popular ETFs today are the SPY-SPDR S&P 500, VOO-Vanguard S&P 500 ETF, QQQ-PowerShares QQQ ETF and others. ETFs offer bigger portfolios and offer great tax advantages.

They also offer the chance to make more money and are securer, profitable investments. You can buy/sell ETFs if you have an online broker account. ETFs are liquid and trade openly in market hours.

But Warren Buffett Hates Gold

Yes, he does. Buffett has been quoted as saying that gold has no use and therefore no intrinsic value. He says the same for Bitcoin and other cryptos as well.

Buffett comes from a time of investing where the utility to the consumer and the profits the company makes off of the product are the true value of the investment. He loves companies like Coca Cola and Apple, so you can see how he forms his investment thesis. 

But just because Buffett doesn’t like gold it doesn’t mean it’s a bad investment. He himself has made plenty of losing trades, so don’t just copy every move he makes. Buffett has his own style of investing and you should have yours.

When he says he doesn’t invest in gold that’s fine, but he also has tens of billions of dollars to afford to make a few bad trades now and again. Unfortunately for us, we don’t all have that luxury. If you know how to trade gold for money, you’ll make money.

Is Trading Gold Profitable?

When it comes to knowing how to trade gold for money, you want to be profitable. That’s why we stress knowing how to read markets. Investment firms and hedge funds use precious metals like gold and silver as safe havens in portfolios. When the market goes bearish, and it will, your portfolio has profits still coming in.

If you pay attention to the charts, then you know that gold goes up when the market it moving down. That doesn’t mean it won’t also go up in a bull market. But more and more people turn their eyes to gold when things get shaky. Making it a profitable investment.

First, the price of gold is rarely volatile. This is what makes it an ideal hedge against market volatility for equities. In 2022, we’ve seen a pretty severe market correction for growth stocks, but even value stocks have dropped.

The S&P 500 and NASDAQ are both deep into bear market territory. Gold? It’s trading at or near its all-time highs. This is the power of having a stabilizer like gold in your portfolio. 

Is it going to make you a millionaire in a few years? Absolutely not. The price of gold is at all-time highs from centuries of being traded.

This is not going to provide long-term capital growth in the same way that tech stocks will. But in a bear market, where stocks are tumbling, gold acts as a way to keep your portfolio above water. 

How Can I Invest in Gold?

Do you know how to trade gold for money? This answer will be different no matter who you ask. In my opinion, for most investors ETFs are one of the best and easiest ways to hold a diversified portfolio.

It takes the stress of researching individual companies and stocks out of your hands. You do pay some management fees, but they are generally fairly low. Gold ETFs are relatively stable and most of them that hold stocks will pay a decent dividend yield to add some cash flow to your account.

Again, this is all dependent on your personal risk tolerance and investment goals. But for 90% of investors who just want a passive portfolio, gold ETFs will provide you with that stability and diversification. 

Gold Stocks

This is an obvious one for how to trade gold for money. You can invest in gold companies like gold miners, gold processors, and even gold merchants. These stocks are tied to the price of spot gold and futures contracts.

So while they may be performing well now, if the price of gold suddenly tanks for some reason, the gold companies will too. This is because their business revenues and margins will depend on how expensive gold is.

The higher the price per ounce, the more the company makes for the same fixed costs and inputs. Here are some gold companies to consider for your portfolio:

Barrick Gold (NYSE:GOLD)

Franco Nevada Corp (NYSE:FNV)

Newmont Corporation (NYSE:NEM)

Royal Gold, Inc (NASDAQ:RGLD)

Hecla Mining Company (NYSE:HL)

Gold ETFs

Having trouble deciding on a single gold company to invest in? There are plenty of gold ETFs that you can add to your portfolio as well. ETFs are great because it gives you exposure to a basket of gold companies.

They also have much lower management fees than mutual funds, and can pay a nice dividend. You can own gold ETFs full of gold stocks, gold futures contracts, and even gold bullion. Here are some gold ETFs to check out when learning how to trade gold for money!

SPDR Gold Shares (GLD)

iShares Gold Trust (IAU)

SPDR Gold Minishares Trust (GLDM)

VanEck Merk Gold Trust (OUNZ)

Goldman Sachs Physical Gold ETF (AAAU)

Proshares Ultra Gold (UGL)

Invesco DB Gold Fund (DGL)

Gold Futures Contracts

An often overlooked way to invest directly in gold is to buy and sell futures contracts. These are contracts for the future price of gold, usually one or two months ahead.

This is essentially a bet on which way the price of gold will go in the future. It’s a fairly advanced trading strategy so most investors will probably prefer to look at gold stocks and gold ETFs instead.

You can usually trade futures contracts on any online brokerage platform. But make sure you know how to trade gold for money before jumping in.

Physical Gold

You can hold physical gold still! Actually there are a couple of different ways to do this. You can go out and buy physical gold from a gold brokerage and hold it at home or store it in a safety deposit box.

Whatever method you think is safer. Remember that gold is heavy, so storing a bunch of bars or bullion at home is not ideal. Another way is through a bank. Most large banks do have a precious metals division that you can invest in.

They will hold the gold for you in their storage, and you can buy or sell your investment at any time. You can even use your gold holdings as leverage to take out a loan or line of credit. This is one of the safer options for investing in physical gold. 

How to Trade Gold for Money Bottom Line

Knowing how to trade gold for money will not only help with the precious metal, but all trading in general. Do you have to hold gold in your portfolio? Absolutely not. I’m not here to tell you guys what to invest in, rather I want to show you that gold can have a place in any portfolio.

I used to scoff at the idea of holding gold. That is an attitude that comes from being in a prolonged bull market. Now that the bear market is here and the recession looks like it might be looming, people are looking for safe havens like gold to hold the value of their wealth. 

I don’t blame them! It’s an awful feeling to see your portfolio balance continue to fall with each passing session. It’s not

Leave a Reply

Your email address will not be published.